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Tuesday, August 16, 2016

The Obamacare Tax Credit Nightmare

Last year, Santa Ana resident Kevin Foley successfully enrolled in an Obamacare insurance plan, thanks in part to a popular tax credit that helps low-income earners afford plans through the exchange. The process for Foley, then a college student, appeared to be hurdle-free.

But after a sudden increase in income and the arrival of tax season, Foley’s situation began to get messy. An $800-plus bill with errant charges from Kaiser Permanente, his insurance provider, unexpectedly propelled Foley into the inner workings of a young, government-sponsored program as he searched for a refund.

“They’ve had me jumping through hoops for months without actually helping me,” Foley said last month. “At one point, I was assigned a case manager who never contacted me and does not return my calls.”

This marks the second year in which any financial implications of Obamacare have to be figured into your taxes – a meeting of two complicated systems that has produced a host of issues for involved parties, from the IRS to enrollees such as Foley.

Foley’s tax dilemma centered on the repayment of the Advanced Premium Tax Credit, a government subsidy that helps reduce the premium costs of plans purchased through state-run insurance exchanges.

From the get-go, Foley was supposed to repay the tax credit directly to Uncle Sam, not to Kaiser. In other words, in his case, Kaiser essentially got paid twice and Foley was on the hook for another large tab. ...